Michigan

CBS Undercover Boss: CEO Business Lessons

I
was sitting at my brother-in-laws house this past Sunday night and he flipped
on the reality TV show called Undercover
Boss on CBS. To say that the show captured our attention is a huge
understatement. For the next hour we were glued to the show and its plotline
which is quite simple. The CEO of a company goes undercover for a few days in
his own organization and works a variety of jobs to observe and gather
feedback.

The
episode we watched had the CEO of Hooters restaurants spending a week in the
field doing everything from working in the kitchen, to taking out the trash, to
working on the production line and handing out coupons to complete strangers on
the sidewalk with two Hooter girls in tow. What amazed me most about the show
was frankly how clueless the CEO was about the day-to-day operations of his
business. For example, in one undercover assignment he worked at one of his
firms packaging plants and mumbled to the business manager during a break that
he hadn’t set foot in the plant since he was 17. I’m guessing he’s in his
mid-forties and when he said this to the plant manager I laughed out loud and
thought, where the heck has this guy been
the last 25 years?

While
his late father started and successfully built up Hooters, the second
generation son who took over the chain amazingly seemed clueless about the
obvious reasons why the chain was having not just sales issues, but more
importantly morale issues with its people.

After
watching the show, I noted a couple of key observations as to why his company’s
sales and employee morale are tanking in tandem.

One,
you’ve got to be seen if you’re in a high visibility leadership role. Donald
Trump calls this, management by walking around, and the Hooters CEO had done
little, if any of this lately. It was quite apparent that he had a major image
problem and was unknown with the troops on the ground. Sure, going to grand
openings with the red carpet, music pumping and Hooter girls via the company
jet is one thing, but it became painfully clear that this was about all the guy
had done the last seven years besides spending time in meetings at the Atlanta
corporate offices. Delegation’s important, but ignoring the people in your operation
is flat out dumb. It was rather obvious that his late father who started the
chain took an interest in people and was visible at all levels with the
employees. The son needs to clearly work on this skill.

Secondly,
a few chairs in his board room need to shuffled up with several new people being
hired and several ‘old-timers’ being shown the door. I watched the body
language and comments from his ‘inner circle’ and it screamed “yes men”
mentality.Who’s been running their
marketing the past few years? Many of the shocking things he saw in the field
should not have been occurring.

Near
the end of the show, the CEO made a quick reference that changes would be
handled by the marketing department. Huh? In this economy, marketing should be
the #1 area of focus to drive new and repeat business for everyone in the
organization. Why in the world was the CEO so casual and clueless with this
vital function in his company? I was shocked, but yet not surprised.

In
this type of economic climate, time and time again, many CEO’s foolishly
blindly hand off this mission critical area instead of holding it more
accountable and monitoring it very carefully.

I
have also seen the following painful scenario play itself out a lot lately,
especially in a recession, where far too many bean counters and CFO’s foolishly
cut back beyond logic on sales and marketing initiatives within the
organization in a short-sighted attempt to look good and save money. Balance is
required. However, the last 18-months in particular I’m seeing firms freeze and
continue to excessively cut back on the sale and marketing functions. You can’t
cut your way to sales. This to me is the dumbest strategy and it reeks of fear
and ultra conservative behavior. If marketing is the oxygen of the enterprise,
why then are so many firms suffocating their sales and future growth
opportunities?

If
you want to see a text book case of corporate stupidity and cut back mentality
gone bad, look at the sad story of Circuit City and the self-imposed doom they
inflicted upon themselves by cutting their top 3000+ sales people a couple of
years ago. The results? Angry customers, lost sales, and finally bankruptcy.
Gee, who’s the genius in the board room who hatched the brilliant plan to save
the company money by downsizing the sales force before the busy holiday season?
This to me is about as criminal as Bernie Madoff’s behavior because it wiped
out thousands of additional jobs and millions in shareholder value.